Friday, June 8, 2012

Games, Lawsuits, and Loans Oh My!


Even with all the excitement surrounding E3, I found a few interesting pieces of news that didn’t actually deal with E3 at all. If you want to check out our coverage of the press conferences and the podcast, where we talk about the conferences and our reactions, check it all out here.  When former employees sue their employers and game companies are on the verge of declaring Bankruptcy, eyes start to focus in to see how the events unfold. Recently, 38 studios, the development team behind Kingdoms of Amalur: Reckoning defaulted on a $75 million dollar loan from the state of Rhode Island and had to lay off their entire staff. If that wasn’t dramatic enough, Activision has paid ex-Infinity Ward developers $42 million. While this looks and smells like a settlement in the ongoing lawsuit between Activision and Modern Warfare creators Vince Zampella and Jason West, it isn’t.

To bring everyone up to speed, Vince Zampella and Jason West created Infinity Ward, and subsequently the popular Modern Warfare franchise, with publisher Activision. When alleged violations of insubordination and breaches of contract surfaced, Activision canned Vince and Jason. Not too long after, the duo filed a suit claiming that Activision had not paid them and their team bonuses that were in the contract for Modern Warfare 2.Not only that, but the suit claimed royalties on all Modern Warfare-branded games. After leaving Activision, West and Zampella announced their move to EA in a partnership to create Respawn Entertainment. Most of the former Infinity Ward team behind the Modern Warfare series moved with them and Activision claimed that West and Zampella were planning to ditch Activision for EA, breaching a contract. Fast forward to now and Activision pays the dev group $42 million, while Jason and Vince are still pushing through with their lawsuit. While a good move by Activision to attempt to make the Infinity Ward group look greedy in front of a jury, West and Zampella are trying to continue with their lawsuit, claiming that the damages in regards to not-paid bonuses and other contractual obligations is much higher than the $42 million. The case will go to trial in front of a jury soon so hopefully we will see a resolution to this dramatic series of events.

In another soap opera worthy tale, 38 Studios may declare bankruptcy due to lack of funds and the inability to pay off a million dollar loan. Baseball player Kurt Schilling created 38 studios and sought to make a good RPG in the form of Kingdoms of Amalur: Reckoning. To make an MMO based in the Kingdoms of Amalur universe, Schilling took a loan from the state of Rhode Island to fund the development of the game. Now, 38 Studios reportedly bounced a $1.125 million check to the state of Rhode Island. With the entire staff laid off, the state of 38 Studios and the IP attached to it is unknown. After meetings, and more emergency meetings, no action has yet to be taken. Depending on what happens next, this could be a first for video games where a state has control over an IP and the direction it is developed. If Schilling and 38 Studios declare bankruptcy, then the debt will fall on the shoulders of Rhode Island’s taxpayers, something I’m sure no one wants to see. Either way this is looking to be an interesting series of events to keep an eye out for.


 With things heating up for both 38 Studios and the IW Duo, this summer will be an interesting time to watch how these events unfold.
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